Spending abroad without fees: cards, cash and the currency trap at the till
Non-sterling fees, dynamic currency conversion, specialist travel cards and cash machine charges explained before you fly
Using the wrong card abroad quietly adds around 3% to everything you buy, and pressing the wrong button at a foreign card machine can add more. This guide explains the fees, the one rule that avoids most of them, and how to take cash without paying twice.
The fees on a standard card
Most everyday debit and credit cards charge a non-sterling transaction fee, typically close to 3% of each purchase. Some add a flat fee on top for cash withdrawals, and credit cards charge interest on cash from the day you withdraw it even if you clear the balance in full.
On a £1,500 holiday spend, a 3% fee is £45 for nothing. The fix is a card designed for overseas use. A growing number of current accounts and credit cards charge no non-sterling fee and convert at the card scheme rate, which is close to the rate you see quoted on the news. Check a comparison site for today's options rather than relying on the card you already have.
Dynamic currency conversion
At a foreign card machine or cash point you will often be asked whether you want to pay in the local currency or in pounds. Paying in pounds is called dynamic currency conversion. The machine's operator sets the exchange rate, and it is nearly always worse than your card's rate by several percent.
Always pick the local currency. This applies even with a fee-free card, because the poor rate is applied before your card sees the transaction. Watch for screens that pre-select pounds, or phrase the choice as "guaranteed rate" or "with conversion".
If a hotel or restaurant charges in pounds without asking, you can ask for the transaction to be voided and rerun.
Specialist travel cards
| Type | What it offers | Watch for |
|---|---|---|
| Fee-free debit card | No purchase or withdrawal fees, scheme rate | Some cap free cash withdrawals per month |
| Fee-free credit card | No purchase fee, Section 75 protection over £100 | Interest on cash withdrawals from day one |
| Prepaid travel card | Load pounds, spend in local currency | Loading fees, inactivity fees, the locked rate is not always better |
| App-based accounts | Fee-free within limits, instant notifications | Weekend exchange rate mark-ups on some |
A fee-free credit card for purchases plus a fee-free debit card for cash covers almost every trip. Clear the credit card in full to avoid interest.
Cash
Cash machines abroad may charge their own fee on top of anything your card charges. It shows on screen before you confirm. Bank-owned machines inside branches usually charge less than standalone ones in tourist areas.
- Withdraw larger sums less often if there is a flat fee.
- Decline the conversion offer on the cash machine too.
- Buying currency before you go is fine for a small float. Airport bureaux give the worst rates in the country; order online for collection or use a high street bureau instead.
- Leftover currency is hard to sell back at a good rate. Spend it or keep it for the next trip.
Practical steps before you fly
- Check whether your existing cards charge a non-sterling fee. It is in the summary box of the terms.
- If they do, apply for a fee-free card at least two weeks before travel.
- Set up the card in your phone wallet as a backup if the physical card is lost.
- Turn on transaction notifications so you spot fraud or an unexpected charge in pounds.
- Note the number to call your bank from abroad; 159 does not work outside the UK.
Watch out for
- Card blocks. Most banks no longer need to be told you are travelling, but a sudden run of foreign transactions can still trigger a block. A second card on a different network avoids being stranded.
- Deposits and holds. Hotels and hire car firms hold a sum on the card. On a debit card that money is unavailable until released, which can take days.
- Contactless limits differ by country and may be lower than at home.
- Buying goods online from a foreign site is also a non-sterling transaction, even from your sofa.
Information only, not personal advice.